LG Chem has announced its strategic entry into the lithium-phosphate-iron (LFP) cathode materials sector through a partnership with China's Huayou Group. This move is accompanied by LG Chem's plan to vertically integrate its cathode supply chain.

On September 22, 2023, LG Chem and Huayou Group signed a comprehensive memorandum of understanding (MOU) to jointly venture into the LFP cathode material market and bolster their cathode supply chain. This partnership will entail the establishment of four facilities, including an LFP cathode material plant and a lithium conversion plant in Morocco, as well as a high-pressure acid leaching (HPAL) plant and a precursor plant in Indonesia.

LG Chem CEO Shin Hak-cheol stated, "We will actively respond to the emerging LFP cathode material market with the Morocco plant as our global base. Our goal is to create a strong, vertically integrated material supply chain flowing from raw materials to precursors and cathode materials and solidify our status as the world's top comprehensive battery materials producer."

In Morocco, LG Chem and Huayou Group's subsidiary Youshan will construct an LFP cathode material plant. This location is significant as it sits atop the world's largest reserve of phosphate rocks. The plant is expected to commence mass production by 2026 with an annual capacity of 50,000 metric tons. It aims to cater to the increasing demand for LFP cathode materials, which are becoming popular due to their cost competitiveness compared to nickel-cobalt-manganese (NCM) cathodes. This quantity of LFP cathode materials is sufficient for installation in 500,000 entry-level electric vehicles with a 50-kilowatt-hour capacity and a 350-kilometer range.

The LFP cathode materials produced in the Morocco plant will be supplied to the North American market and enjoy subsidies under the U.S. Inflation Reduction Act (IRA) due to Morocco's participation in the U.S. Free Trade Agreement (FTA). LG Chem and Youshan will adjust their shares to comply with the regulations of the Foreign Entity of Concern (FEOC) regulations of the IRA.

LG Chem's ambitions extend beyond the LFP cathode materials business in Morocco. It plans to expand into lithium-manganese-phosphate-iron (LMFP) cathode materials, a blend of manganese and LFP known for providing greater capacity and improved output compared to pure LFP cathode materials.

Additionally, LG Chem will collaborate with Huayou Cobalt in Morocco to establish a lithium conversion plant. This facility will extract lithium hydroxides and lithium carbonates, essential components for cathode material production, from lithium concentrates. By 2025, the lithium conversion plant is anticipated to produce 52,000 tons of lithium annually, supplying it to the LFP plant.

Beyond Morocco, LG Chem and Huayou Cobalt are exploring opportunities in Indonesia, a country actively promoting battery manufacturing and electric vehicles due to its cost competitiveness and vast nickel reserves. Their collaboration will encompass the vertical integration of the cathode materials supply chain, from HPAL to precursor production, in alignment with IRA standards.

Additionally, the companies are considering the establishment of a precursor plant in Indonesia with an annual production capacity of 50,000 tons. They will also discuss constructing a plant for extracting mixed hydroxide precipitate (MHP) from nickel ore for precursor production.

 

Source: prnewswire.com

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